S.Korea stocks rebound on China PMI, won strengthens

Sun Jun 22, 2014 11:11pm EDT

* Private preliminary China factory survey lifts risk
appetite
    * Stocks rebound from a 1.2 percent drop on Friday
    * Won resumes strength against the dollar

    SEOUL, June 23 (Reuters) - South Korean shares rebounded on
Monday morning on bargain hunting after suffering the worst day
in eight weeks in the previous session, with China's factory
activity growth in June cheering the market.
    The Korea Composite Stock Price Index (KOSPI) was up
0.5 percent at 1,978.13 points as of 0256 GMT, rising as high as
1,979.67. The index had shed 1.2 percent on Friday, the biggest
daily percentage drop since April 25.
    "An upbeat figure certainly brings out cheers, but it will
be short-lived as investors have to take into consideration that
it is a preliminary survey," said Shinhan Investment Corp
analyst Han Beom-ho, referring to China's June manufacturing
Purchasing Managers' Index.
    A private survey on Monday showed China's manufacturing PMI
in June expanded for the first time in six months, rising to
50.8 from 49.4 in May, offering new signs South Korea's largest
export market is stabilising. 
    "The market's rise is likely to be hampered this week on
worries over the grim earnings outlook as we approach the end of
the April-June quarter. On top of that, external factors such as
unrest in Iraq and a possible default in Argentina could make
more noise."
    Offshore and domestic institutional investors positioned as
net buyers, purchasing a combined 78 billion won ($76.64
million) worth of KOSPI shares near mid-session to buttress the
main bourse.
    Samsung Electronics Co Ltd, the KOSPI's largest
component, rose 1.6 percent following a 4.8 percent weekly loss
in the previous week on worries over quarterly earnings
estimates.
    Dong-A ST Co Ltd, a pharmaceutical company, rose
2.4 percent after announcing on Sunday it had gained approval
from the U.S. Federal Drug Administration for antibiotics that
target super-bacteria. 
    In the currency market, the won strengthened against
the dollar, buoyed by appetite for riskier assets following the
bullish Chinese PMI survey. 
    "The market appears to test resistance at the 1,017-8 level
after the release of the China survey," said a currency dealer
at a domestic bank. 
    The local currency was quoted at 1,017.6 versus
the dollar as of 0256 GMT, up 0.3 percent from Friday's onshore
close at 1,020.6.
                       0256 GMT    Prev close
 Dollar/won            1,017.6       1,020.6
 Yen/won            9.9853/765x        9.9962
 *KTB futures           106.42        106.43
 KOSPI                1,978.13      1,968.07
 * Front-month futures on three-year treasury bonds
($1 = 1017.8000 South Korean Won)

 (Reporting by Jungmin Jang; Additional reporting by Yena Park;
Editing by Stephen Coates)
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